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TRANSPARENCY REPORT II Have Hong Kong Garment Companies Improved Their Reporting on Labour Standards?


Š Oxfam Hong Kong March 2009 This paper is based on research undertaken by CSR Asia, with Dr. Stephen Frost and Ms. Catherine Walter as the researchers. CSR Asia is a social enterprise that strives to be the leading provider of information about Corporate Social Responsibility in the Asia-Pacific region. CSR Asia builds capacity in companies and their supply chains to promote awareness of CSR in order to advance sustainable development across the region. The text may be used free of charge for the purposes of advocacy, campaigning, education, and research, provided that the source is acknowledged in full. Oxfam Hong Kong requests that all such use be registered with them for impact assessment purposes. Oxfam Hong Kong staff Ms. Kalina Tsang is the coordinator of this research project. For further information on the issues raised in this paper, please e-mail kalina@oxfam.org.hk. The report is freely available on Oxfam Hong Kong’s website at www.oxfam.org.hk and www.maketradefair.org.hk.


contents

Introduction

Oxfam’s Concern with Labour Standards Benefits of Transparency to Hong Kong Companies

1 2

Methodology

What We Are Rating How We Collected Information The Companies We Studied Rating the Companies

4 4 4 7

Research Criteria

1. Governance and Risk Management 2. Code of Conduct 3. Stakeholder Engagement 4. Management 5. Auditing and Reporting

8 9 11 12 13

Findings

Research Findings Supplementary Interviews Esquel Esprit Giordano Trends among smaller Hong Kong apparel brands Moiselle U-Right Future Outlook

15 17 17 18 19 20 21 22 22


New Trends in Sustainability Reporting and Sustainable Supply Chains

New Trends in sustainability reporting among leading international brands Training programs for factory management and workers Worker empowerment projects between brands and NGOs in China Beyond monitoring: a new vision for sustainable supply chains Disclosure of names and addresses of supplier factories Footprint Chronicles – a social and environmental impact tracking system

23 23 24 24 25 25

Conclusion and Recommentations

Conclusion Recommendations to Hong Kong Apparel Companies Recommendations to Multinational Apparel Brands Recommendations to Consumers Recommendations to Investors Recommendations to the HKEx

28 29 29 30 30 30

Individual CompaNy Report Cards

Esquel Group of Companies Li & Fung Limited Glorious Sun Enterprises Limited Esprit Holdings Limited Giordano International Limited Chickeeduck Hembly International Holdings Limited

32 34 36 38 40 42 44

Endnotes and References

Endnotes References

46 47


Introduction

Oxfam’s Concern with Labour Standards In 2007, 1.3 billion people were at work but still lived 1

The Transparency Report was the first time that Hong Kong garment companies were rated according to how open and clear they were in reporting on their supply chain labour standards. Although the results revealed

below the USD$2 a day poverty line. Issues of global

that very few garment companies were actually reporting

concern such as labour abuses and supply chain issues,

on their ethical supply chain practices in Hong Kong, it

continuing scandals over product safety and widespread

generated interest among the media, consumers, socially

corruption hit people vulnerable to poverty first and

responsible investors and the Hong Kong garment

hardest. Oxfam Hong Kong believes there is a need

companies themselves. One of the outcomes has been

for business to take the lead in developing improved

the creation of the garment roundtable in 2007 to discuss

labour standards and practices. We have long been

issues regarding social compliance and transparency in

active in promoting corporate responsibility and good

the supply chain. To enhance learning among companies

labour standards in the garment industry, an industry

and stakeholders, Oxfam Hong Kong also organised

that employs hundreds of thousands of mainly women

a Sustainable Reporting Seminar for the Apparel and

workers in developing countries, many of whom work in

Footwear Industry.

difficult and insecure conditions. This second Transparency Report revisits the issue of In 2004, we released the research report Turning the

transparency in Hong Kong garment sector supply chain

Garment Industry Inside Out – Purchasing Practices

operations and seeks to provide an updated view of the

and Workers’ Lives; and we advocated for changes

overall performance, key developments and some of the

in purchasing practices, as well as for improved

key issues facing Hong Kong companies in this critical

practices in corporate social responsibility (CSR) by

area. We hope that this report will encourage more

garment companies. We published a CSR resource

Hong Kong garment companies to come forth and share

kit for the garment industry. In 2006, we launched the

in our efforts to improve labour standards, corporate

first Transparency Report – How Hong Kong Garment

transparency and simultaneously the reputation and

Companies Can Improve Public Reporting of their

competitiveness of Hong Kong companies.

Labour Standards. The report called on Hong Kong’s top garment retailers to provide consumers and investors with sufficient information they need to make ethical buying and investment choices.

TRANSPARENCY REPORT II

1


Benefits of Transparency to Hong Kong Companies

focus on the European and US markets, they will face more scrutiny from western activists, NGOs, consumers, trade unions, media and so on.

Although Hong Kong is still considered primarily a sourcing centre for the apparel manufacturing of big

A few of the larger companies are beginning to feel

US and European brands, its home grown brands are

pressure from investors about their social compliance.

increasingly getting noticed abroad. Large apparel

They find that they are fielding more and more requests

brands such as Esprit, Giordano, Baleno, Bossini,

about supply chain practices from institutional investors,

G2000, Jeanswest and Crocodile have expanded to

socially responsible investors and NGOs. The publication

major cities in Europe, the US and the Middle East.

of information about their supply chain practices in regard

Hong Kong apparel brands may have a widespread

to labour and environment issues would serve as a

geographic network, but most are still primarily focused

central reference for these types of inquiries, saving staff

and dependent on markets in the Asia-Pacific region.

time and presenting a consistent official company view.

Therefore, they have had limited exposure to the added

The longer-term benefit, of course, is an improvement in

pressures of more mature markets, which include more

competitiveness not only locally but globally as well.

stringent reporting requirements, heightened consumer expectations, and NGO and media scrutiny. We believe

Public reporting on social compliance in the supply chain

that Hong Kong brands have great global potential,

is a critical first step for Hong Kong apparel companies,

and that improved transparency is a potent strategy to

as this topic is seen as a major trade issue in Asia. The

improve access to and opportunities in these markets.

Asian Development Bank’s report Asian Development Outlook 2006: Routes for Asia’s Trade, highlights that

As Hong Kong apparel brands become increasingly

the garment sector in Asia is under pressure from

well-known at home and abroad, they can expect to

international buyers and development partners to ensure

begin experiencing a new interest in their information

compliance with social and labour standards. The Bank

disclosure on corporate governance and corporate

cites raised productivity and quality levels as a direct

social responsibility. Public reporting is an integral

result of the improved welfare of workers.

part of CSR and business ethics because it makes companies accountable to their stakeholders and fosters

Leading global companies in the apparel sector have

better internal management processes to improve

taken the lead in promoting reporting on CSR; some

overall performance. Bad reporting is perceived as a

small and medium enterprises (SMEs) in global supply

sign of bad performance and leads to worry and a lack

chains have also taken the first steps in reporting.

of trust among stakeholders. Good public reporting

Hong Kong companies, no matter how large or small,

improves corporate image and reputation and, if part of

should also be able to live up to recognised international

a broader CSR strategy, results in improved recruitment

standards and practices.

and retention, competitive differentiation, better risk management, access to new markets and improved management. In terms of risk management, Hong Kong companies have two main reasons to improve their transparency. First, as manufacturers, they are under increased pressure from their clients to comply with CSR standards and rising expectations from those clients for better transparency. Second, as Hong Kong brands begin to

2


Box 1: Case Study on CSR Reporting by a Chinese SME A study released earlier this year by the Global

Shunde Hengfa’s report covered a period of six months

Reporting Initiative (GRI), entitled Small, Smart and

and adhered to a small number of GRI indicators to

Sustainable: Experiences of SME Reporting in Global

comply with the basic reporting level of the Guidelines.

Supply Chains, outlines the added value of the CSR

The factory preferred to start slowly and build up its

reporting process for SME suppliers in emerging

reporting practices and capabilities over time. The report

economies and how it enhances understanding of CSR

was produced in Chinese and English in order to reach

and transparency in the supply chain. The Otto Group,

local and international readers, and included goals for

based in Germany, was used as a case study for the

the next five years. These included more skills training

retail industry. One of Otto’s China-based suppliers,

courses to address the labour shortage issue.

Shunde Hengfa Knitting Garment Co. Ltd, participated in the study.

The main benefits of the reporting process were the development of management systems and improved

Shunde Hengfa is a traditional family-run factory with

priority setting. The company’s Managing Director,

women’s lingerie as their main product. They are part of

who was responsible for the reporting process, stated

the Hong Kong-based Wan Fat Group and have over 200

that “Systematic collection of data, analysis of the data

employees. Their turnover was around HK$ 7,401,198

and being transparent about the data gives our middle

(US$949,097) for the reporting period January-October

management a comprehensive understanding of the

2007. Shunde Hengfa had just finalised its Business

operation process of our factory.” Another benefit cited

Social Compliance Initiative (BSCI) certification process

was a better understanding of CSR concepts and an

for the first time in 2007 and was relatively new to the

improved familiarity with global CSR concerns, such

concept of CSR. The factory was initially critical of

as carbon emissions and waste, as well as their own

implementing the project because it had never been

impacts on sustainability.

asked by its customers to create a CSR report. The trust relationship with Otto helped convince the factory to test

Participating multinational enterprises observed that

out CSR reporting.

the reporting exercise gave their suppliers the ability to speak for themselves through a report, rather than

The most material issues found for Shunde Hengfa

passively responding to demands for management of

were those regarding its employees, as the factory was

certain issues. They commented that reporting enabled

coping with a shortage of labour in the region. Therefore,

their suppliers to become stronger and more proactive

employee satisfaction and retention of skilled workers

and organisations. They saw reporting as a way to

were considered vital to the company. In its report,

enhance the quality of their supply base.

Shunde Hengfa identified excessive overtime as a key challenge and committed itself to the improvement of this issue.

Source: Global Reporting Initiative (GRI), 2008. “Small, Smart and Sustainable: Experiences of SME Reporting in Global Supply Chains.”

TRANSPARENCY REPORT II

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Methodology

What We Are Rating

Once preliminary company scores were established,

Building on the first Transparency Report, this year’s

chairperson via registered mail in June 2008 for review

report aims to assess the level of transparency demon-

and evaluation. Companies were given the opportunity

strated by Hong Kong apparel companies regarding their

to provide additional publicly available information that

ethical performance in the supply chain. It is important to

would be relevant to the research and would improve

keep in mind that this report evaluates transparency and

their score. Approximately six weeks following the initial

not actual performance. To measure transparency, only

mailing, a second mail was sent to provide another

publicly available information released by the companies

chance for companies to review their scores and to

themselves is included in this research. Since this report

submit relevant information for final consideration.

focuses on the supply chain, Hong Kong companies’

This process resulted in additional data being taken

operations such as retail stores and merchandising

into account in compiling the final score cards. In

departments are excluded from this research.

particular, Esquel, Glorious Sun and Chickeeduck

they were sent to each company’s chief executive or

showed a commitment to the process. These companies We recognise that this approach has limitations. We

contributed time and resources to supplement the

are aware that companies’ reports and websites may

research with updated, publicly available information

not reflect the current extent of their activities. If this

about the latest developments in their supply chain

is the case, we hope this report will encourage those

management.

companies to improve their reporting to the public. There are multiple benefits of honest, transparent reporting for companies; and we believe that Hong Kong apparel brands are ready to take this next step.

The Companies We Studied This year, we expanded the research from the original 16 garment companies to 26 major Hong Kong apparel

4

How We Collected Information

companies. As in the previous research, the additional

As a first step, we gathered company profile data to allow

Development Council database of garment companies

for later comparisons based on characteristics such as

and fit the key characteristics of the initial study group.

size, market presence and nature of ownership. The

Companies in this year’s report cover major market

second stage of the research was based on corporate

segments and sub-divisions of those markets in Hong

websites, annual reports and/or CSR reports. These

Kong. They range from small, medium to large, and from

sources were used to collect relevant data during the

private to some of the largest publicly-listed companies

compilation of company scores in May 2008.

in Hong Kong. Despite such diversity, most are well-

10 companies were drawn from the Hong Kong Trade


known local brands and household names. As previously,

greater China. All companies have stores in Hong Kong,

all companies are Hong Kong-owned or predominantly

88% have stores in the People’s Republic of China

Hong Kong-owned.

(PRC), and 58% have stores in Macau and in Taiwan. Southeast Asia is the next dominant market, with 65%

The 26 companies in this report account for over 100

of companies having retail outlets in the region. Twenty-

Hong Kong brands and over HK$ 170 billion in annual

seven percent of companies have stores in the Middle

turnover. They operate over 21,000 retail outlets in more

East and in Europe. Only four of the companies have

than 40 countries and are focused on the markets of

retail outlets in the US.

Table 1: Company Profiles Company

Place of Incorporation

Brands Owned

Bauhaus International (Holdings) Limited

Cayman Islands Bauhaus, Tough Jeansmith, Salad, 80/20, Elite

Belle International Holdings

Cayman Islands Belle, Staccato, Teenmix, Tata, Fato, JipiJapa

Bossini International Holdings Limited

Bermuda

Chickeeduck

Turnover (HK$ million)

No. of Stores

Outlet Locations

Market Segment

509

64

Hong Kong, PRC, Taiwan

Trendy fashion for young consumers, fashionable women's wear, militaryinspired chic casual, denim, apparel, bags and accessories

13,271

6,143

Hong Kong, PRC, Macau, US

Men's and women's footwear, sportswear, handbags and accessories

Bossini, Sparkle

2,568

1,051

20 countries including: Men’s and women’s casual PRC, Hong Kong, Taiwan, wear, children’s wear Korea, Singapore, Vietnam, Philippines, Thailand, Indonesia, Malaysia, Europe, Middle East, Russia, Africa

Hong Kong

Chickeeduck, People’s Republic

>100

48

Crocodile Garments Limited *

Hong Kong

Crocodile, Crocosport, Crocoladies, Crocokids, My First Croco

441

512

Hong Kong, Macau, PRC

High-end, executive men’s and women’s apparel, baby and children’s apparel, sportswear and accessories

Dickson Concepts (International) Limited

Bermuda

Polo Ralph Lauren, Polo jeans Co. Ralph Lauren, Ralph Lauren Collection, Seibu, Harvey Nichols, Goyard, Tommy Hilfiger, TOD's, Brooks Brothers, Michael Kors, Hogan, Bertolucci, Dickson Watch & Jewellery, Chopard, The Royal Diamond, Charles Jourdan

3,100

500

Hong Kong, PRC, Taiwan, Singapore, Malalysia, Philippines

Men's and women's wear, jeanswear, luxury goods

Esprit Holdings Limited

Bermuda

Esprit

29,640

604

Over 40 countries including: Hong Kong, PRC, Taiwan, Singapore, Macau, Malaysia, Australia, Europe, US and Canada

Men’s, women’s, youth and children’s apparel, shoes and accessories

Esquel Group of Companies

NA

PYE

> 3,000

4

PRC

Luxury women’s and men’s shirts

Fashion Community Kitterick (F.C.K)

Hong Kong

Kitterick, Z, K-2, a.y.k., indu home, Red’s

NA

59

Hong Kong, PRC, Malaysia

Alternative youth, city girl, shoes and socks for women, men’s and women’s apparel, youthful women’s apparel

G2000 (Apparel) Limited

NA

G2000, U2 (LAB), G2000 Pink, G2 blu, G2 Black Label, UWN

NA

Over 800

Hong Kong, Macau, PRC, Singapore, Taiwan, Malaysia, Thailand, Indonesia, Philippines, Cyprus, Middle East

Men’s and women’s career, trendy and casual wear

PRC, Hong Kong, Baby, chic children’s wear Macau, Indonesia, Korea, and accessories, fashionable Australia, Saudi Arabia and women’s wear United Arab Emirates

TRANSPARENCY REPORT II

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Company

Place of Incorporation

Brands Owned

Gay Giano International Group Limited

Bermuda

Gay Giano, Cour Carre, DueG

Giordano International Limited

Hong Kong

Glorious Sun Enterprises Limited

Turnover (HK$ million)

131

15

Giordano, Giordano Ladies, Giordano Junior, Bluestar Exchange, Blue Navy, Giordano Concepts

4,950

Bermuda

Jeanswest (Spoylt, Denial), Quicksilver Glorious Sun

Goldlion Holdings Limited

Hong Kong

Goldlion, Van Garie

Hembly International Holdings Limited

Cayman Islands Sisley, Lotto, Stonefly, Bond Street, Bond Street Collection

Heroic Rendezvous

Hong Kong

Heroic Rendezvous, Psychedelic

I.T Limited

Bermuda

Li & Fung Limited

Bermuda

Outlet Locations

Market Segment

Hong Kong

Men's and women's designer fashions, executive wear, trendy youth wear

1,895

30 countries including: Hong Kong, PRC, Japan, Korea, Taiwan, Singapore, Indonesia, Thailand, Philippines, Australia, Myanmar, Brunei, Vietnam, Malaysia, India, Middle East, US, Canada

Men’s and women’s casual wear, children’s wear

4,784

1,940

Australia, New Zealand, Middle East, PRC, Hong Kong, Macau, Thailand, Vietnam

Denim, casual wear apparel, board-rider sports wear

1,073

Over 927

Hong Kong, PRC, Singapore, Malaysia

Ties, leather goods, men’s accessories

1,037

205

Hong Kong, Italy, France, Sweden, Germany, PRC, Macau

Men and women's trendy fashion, luxury and sports apparel and footwear

NA

>4

Hong Kong

Young men’s and women’s casual apparel, smart casual office wear

I.T., b-ab, http://www.izzue. com, 5cm, i.t loves mickey, chocolate

1,530

370

Tommy Hilfiger, Peter Black, Regatta, Emma James, Intuitions, JH Collectibles, Tapemeasure, American Marketing Enterprises, Lenci Calzature, Rosetti, Briefly Stated, Young Stuff

92,459

NA

Over 40 countries, including: Hong Kong, PRC, Macau, Taiwan, SE Asia, Korea, Japan, Middle East, Europe, US and Africa

Men's, women's, youth and children's apparel, jeanswear, shoes, handbags and accessories, outdoorwear and footwear, underwear and sleepwear

352

123

Hong Kong, PRC, Macau, Taiwan

Women’s wear, children’s wear

NA

92

Hong Kong, PRC, Macau, Taiwan, Malaysia, Australia, Canada, New Zealand

Japanese hip and chic, mature and sophisticated fashion for women, casual and unisex apparel

Moiselle International Cayman Islands Moiselle, mademoiselle, Holdings Limited imaroon, M.kids

Hong Kong, PRC, Taiwan, Young casual, women’s mass Macau, Malaysia, Thailand, market, young fashion, trendy Saudi Arabia women’s fashion

PMTD Limited

Hong Kong

2%, +–×÷, th:, ODF

Texwinca Holdings Limited

Bermuda

Baleno, Samuel&Kevin, Baleno Attitude, E-Base, IP Zone, Bambini, City Jeans

8,299

3,787

Hong Kong, PRC, Taiwan, Macau, Singapore, Malaysia

Men's and women's casual wear, children's wear

Toppy International Limited

NA

Episode, Episode Essentials, Episode Studio, Jessica, Colour Eighteen and Weekend Workshop

NA

Over 300

Hong Kong, PRC, Taiwan, Thailand, Macau, Philippines, Singapore, UK

Fashionable women's wear, children's wear, teen's wear, executive wear

U-Right International Holdings Limited

Bermuda

U-Right, Sevendays, U-MIX

1,774

548

Hong Kong, PRC

Women’s wear, men’s wear, casual wear

Veeko International Holdings Limited

Cayman Islands Veeko, Wanko, i-MIX

642

200

Hong Kong, Macau, Taiwan, PRC, Singapore

Women’s wear, casual wear, executive wear

Hong Kong, Macau, PRC, Men's and women's executive Taiwan, Europe, and city wear and accessories, South East Asian countries sophisticated, contemporary and elegant women's fashion

YGM Trading Limited Hong Kong

Michel Rene, Guy Laroche

1,023

347

Young Grace International Limited

I.S.O, MCP, Street Couture by ISO

NA

44

Hong Kong

* Formerly Lai Sun Garment (International) Limited. Lai Sun Garment sold its stakes in Crocodile Garments Limited to Rich Promise Limited (RPL) in 2006 and ceased to engage in any garment business. RPL is the major shareholder of Crocodile Garments Limited.

6

No. of Stores

Hong Kong, PRC, Taiwan and other Asian countries

Trendy street wear for Rebels

* Please note: the above data was collected in May 2008 and provides a snapshot of company operations during this time period. U-Right International Holdings Limited started liquidation since October 2008.


Rating the Companies

effect, these changes had no impact on the vast majority of companies. However, those companies that disclosed

We a p p l i e d t h e m e t h o d o l o g y u s e d i n t h e f i r s t

information about their Code of Conduct were rewarded

Transparency Report, which was based on the Gradient

with a slightly improved score.

2

3

Index rating system developed by AccountAbility in the UK. The Index is an internationally recognised

The table below shows the five categories and the

standard, which has been applied to a range of industry

adjusted weightings.

sectors over the past few years. It aims to promote best practice management of supply chain labour standards

Table 2: Gradient Index and Weightings

by assessing companies’ performance according to 19 Category

standard criteria across the following five categories: Governance and Risk Management, Code of Conduct,

Weighting (% of total score)

Governance and risk management

10%

Code of conduct

20%

Stakeholder engagement

20%

practices. The overall score of each company can range

Management

20%

from 0 to 100.

Auditing and Reporting

30%

Total

100%

Stakeholder Engagement, Management, as well as Auditing and Reporting. Scores are awarded according to how close the company’s reporting efforts are to international labour standards and emerging best

The Gradient Index allows for flexibility to enable the most suitable adaptation of the rating system to the study objectives, industry sector and market being assessed. Users are able to adjust the weighting of the core index criteria to create their own index according to their priorities. For example, this methodology has been modified and applied to apparel companies operating in the Canadian market in 2005 and 2006 by the Ethical Trading Action Group (ETAG)4. The initial Transparency Report followed an “apple to apple” comparison with the performance of the Canadian market. However, this year’s report methodology has been adapted to the level of performance in the Hong Kong market. In light of the overwhelmingly low scores Hong Kong apparel companies received in the previous report, the weightings of the core index have been adjusted in order to encourage Hong Kong companies to improve. The following two changes were made: the weighting of section 2 (Code for Labour Standards in the Supply Chain) was slightly raised from 15% to 20%, and the weighting of section 5 (Auditing and Reporting) was slightly lowered from 35% to 30%. In making these adjustments, we were conscious not to compromise the quality and credibility of the report. In

TRANSPARENCY REPORT II

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Research Criteria The full description of the 19 specific criteria for the five categories and their weightings are provided below.

1. Governance and Risk Management This category evaluates the extent to which a company’s board of directors has recognised and begun to address the potential risks associated with labour standards compliance in its supply chain. (Worth 10% of overall score)

Criteria: Governance and risk management

Scoring

Weighting

1.1 Board-level responsibility for ethical issues in the supply chain There is a formal sub-committee of the Board of Directors with explicit responsibility for ethical issues in the supply chain.

100%

There is a member of the Board of Directors with explicit responsibility for ethical issues in the supply chain.

66.7% 40%

There is a member of the Board of Directors or committee with responsibility for CSR issues, but it is not clear if this includes responsibility for ethical issues in the supply chain.

33.3%

There is no evidence of responsibility at the Board of Directors level for ethical issues in the supply chain either specifically or as part of responsibility for CSR issues.

0%

1.2 Reporting of labour standards issues in the supply chain as a risk factor There is evidence in the annual report and accounts of a systematic analysis of labour standards issues as a risk factor.

100%

There is mention in the annual report and accounts of labour standards issues as a risk factor.

66.7%

There is mention on the corporate website or in other corporate material of labour standards issues as a risk factor.

33.3%

There is no mention of labour standards issues as a risk factor.

30%

0%

1.3 Risk analysis of ethical issues in the company’s existing supply chain A risk or exposure analysis of ethical issues in the company’s existing supply chain has been conducted. A risk or exposure analysis of ethical issues in the company’s existing supply chain is yet to be conducted, but there is a stated commitment to undertake one. There is no mention of conducting a risk or exposure analysis of ethical issues in the company’s existing supply chain.

8

100% 50% 0%

30%


2. Code of Conduct This category assesses public accessibility, completeness, and application of the company’s policies and codes of conduct on labour standards in the supply chain. (Worth 20% of overall score)

Criteria: Code for labour standards in the supply chain

Scoring

Weighting

2.1 Quality and scope of the code for labour standards in the supply chain A code for labour standards in the supply chain exists that covers all ILO core conventions, without qualification or limitation. (see Box 2)

50%

A code for labour standards in the supply chain exists that addresses all of the issues of the ILO core conventions but limits or qualifies the company’s commitment to one of the ILO core conventions.

25%

There is no code that addresses labour standards in the supply chain, or a code exists that covers some but not all ILO core conventions, or the code limits or qualifies the company’s commitment to more than one of the core conventions.

0%

+25% if the code includes a living wage provisions +25% if the code includes an hours of work provision that is consistent with ILO conventions (see Box 3)

60%

2.2 Publication and availability of the code for labour standards in the supply chain The complete code for labour standards in the supply chain is available to the public.

100%

The code for labour standards in the supply chain is referred to in published information.

66.7% 20%

The company will supply the code for labour standards in the supply chain on request, but there is no reference to it in published information. There is no evidence of a code for labour standards in the supply chain in published information.

33.3% 0%

2.3 Application of the code for supply chain labour standards The code for supply chain labour standards applies to the entire breadth of or almost the entire breadth of the supply chain, including the company’s own procurement.

100%

The code for supply chain labour standards applies to the entire breadth of or almost the entire breadth of the supply chain but does not apply to the company’s own procurement.

66.7% 20%

Application of the code is (clearly or deliberately) limited to a portion of the supply chain or to certain products or to selected suppliers or countries of supply. It is unclear how much of the supply chain the code for supply chain labour standards applies to, or there is no code addressing labour standards in the supply chain.

33.3%

0%

TRANSPARENCY REPORT II

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Box 2: ILO Labour Standards Compliance As a beginning step in a company’s labour standards

right where and when it is legally recognised. In other

compliance programme, a code of conduct should, at the

words, suppliers are not expected to do more than

minimum, meet the core conventions of the International

they are required to do by law. A common justification

Labour Organization (ILO). A summary of the core

for qualifying a company’s commitment to freedom of

conventions and a guideline on compliance is provided

association is the legal restriction on that right in the

below.

People’s Republic of China.

ILO Core Conventions Core Conventions of the ILO

Regarding child labour, the ILO sets the minimum age Convention Detail

Conventions 29 and 105

Elimination of Forced and Compulsory Labour

Conventions 87 and 98

Freedom of Association and the Right to Collective Bargaining

Conventions 100 and 111

Elimination of Discrimination

Conventions 138 and 182

Abolition of Child Labour

at 15, and allows an exception of 14 for some kinds of labour in developing countries. Companies often prohibit children under 18 (or 17) to work in factories, but allow those aged 15 or 16 to work under special circumstances (such as apprenticeship schemes). Even where the law of the country of manufacture allows 14-year-olds to work, no companies actively encourage such practices though a literal interpretation would suggest that 14 is an acceptable minimum age in all countries where the

Three core labour rights to which companies often

law permits.

qualify their commitment are freedom of association, non-discrimination, and the prohibition of child labour.

Regarding discrimination, the ILO says there shall be no discrimination in access to employment, particular

Companies that qualify their commitment to freedom of

occupations, training, conditions of employment, pay or

association and the right to bargain collectively usually

benefits on the basis of race, colour, gender, religion,

indicate that suppliers are only required to respect this

political opinion, national extraction or social origin.

Box 3: Hours of work and a living wage

10

Standards for hours of work for various occupations

There is growing consensus on the need to include

and workplaces are established by numerous ILO

provisions in codes of conduct that provide for

conventions. The general rule is that workers shall

payment of a living wage. While a company should at

not be required to work more than 48 hours per week

the minimum ensure that, where applicable, legally-

on a regular basis, that overtime hours shall be

mandated minimum wages are being paid, and that

voluntary and restricted to 12 hours per week, and that

the prevailing industry wage in the area is being met,

workers are entitled to one day off in every seven-day

it should also commit to ensuring that the wage paid is

period.

sufficient to meet workers’ basic needs.


3. Stakeholder Engagement This category assesses the extent to which a company reports actively and engages with key stakeholders, such as non-government organisations (NGOs) and unions, in importing countries and in the country of manufacture. Ongoing and regular engagement was viewed more favourably than irregular or ad hoc engagement. (Worth 20% of the overall score)

Criteria: Stakeholder engagement

Scoring

Weighting

3.1 Membership of multi-stakeholder processes The company is a member of the Ethical Trading Initiative, the Fair Labor Association or Social Accountability International and/or is involved in a comparable initiative that includes representation from both NGOs and labour.

100% 50%

The company is not a member of the Ethical Trading Initiative, the Fair Labor Association or Social Accountability International or of a comparable initiative that includes representation from both NGOs and labour.

0%

3.2 Engagement with NGOs and/or trade unions relating to labour standards in supply chains There is evidence of stakeholder engagement over time with NGOs and/or trade unions (excluding membership of groups in 3.1) that includes engagement in country of manufacture.

100%

There is evidence of stakeholder engagement over time with NGOs and/or trade unions (beyond membership of groups in 3.1) in the host country only.

66.7%

There is evidence of only ad hoc stakeholder engagement with NGOs and/or trade unions (beyond membership in Multisectoral Initiatives or MSIs in 3.1), or it is unclear whether engagement is taking place over time. There is no evidence of proactive engagement with NGOs and/or trade unions beyond membership in MSIs in 3.1.

50% 33.3%

0%

TRANSPARENCY REPORT II

11


4. Management Companies need to have management systems in place that enable them to achieve and maintain compliance. This includes proper training for both factory management personnel and workers on the ground. For instance, both management and workers should be aware of the provisions contained in codes of conduct. (Worth 20% of the overall score)

Criteria: Management

Scoring Weighting

4.1 Resource commitment There is a senior manager whose primary responsibility includes labour standards in the supply chain. The manager is two or fewer reporting levels from the board. There is a senior manager whose primary responsibility includes labour standards in the supply chain. The manager is more than two reporting levels from the board, or it is not clear how many levels from the board he or she is. There is no senior manager whose primary responsibility includes labour standards in the supply chain.

100%

50%

30%

0%

4.2 Training for buying agents There is ongoing, scheduled training for buying agents on labour standards in the supply chain. There is training for buying agents on labour standards in the supply chain, but it is on an ad hoc rather than a scheduled basis. There is no training for buying agents on labour standards in the supply chain.

100% 50%

25%

0%

4.3 Training for factory management personnel and workers There is ongoing, scheduled training for factory workers and management personnel on labour standards in the supply chain.

100%

There is training for factory workers and management personnel on labour standards in the supply chain, but it is on an ad hoc rather than an ongoing, scheduled basis.

66.7% 25%

There is training for factory management personnel on labour standards in the supply chain, but there is no training for factory workers. There is no training for factory management personnel or factory workers on labour standards in the supply chain.

33.3% 0%

4.4 Rewards and incentives Incentives for senior management and/or purchasing staff are explicitly linked to their performance on labour standards in the supply chain.

100%

Incentives for buying and/or ethical trading staff are explicitly linked to their performance on labour standards in the supply chain.

66.7%

Incentives for labour teams are explicitly linked to their performance on labour standards in the supply chain.

33.3%

There is no mention of incentives that are linked to labour standards in the supply chain.

12

0%

20%


5. Auditing and Reporting This category rates the extent to which companies report on their audit process to achieve labour standards compliance within their supply chains, how auditing is planned, and how transparent the company is regarding audit findings and corrective action. (Worth 30% of the overall score)

Criteria: Supply chain auditing and reporting

Scoring

Weighting

5.1 Commitment to auditing labour standards in the supply chain There is a policy committing the company to auditing labour standards across the entire breadth of the supply chain. There is a policy committing the company to ad hoc auditing or to pilot audits of labour standards across at least part of the supply chain, or the level of commitment to auditing labour standards in the supply chain is unclear. There is no evidence of a policy committing the company to any form of auditing labour standards across any part of the supply chain.

100%

50%

15%

0%

5.2 Status of audit schedule An auditing work plan has been scheduled and is currently being implemented.

100%

An auditing work plan has been scheduled but has not yet been implemented.

50%

There is no scheduled work plan for auditing labour standards in the supply chain, or there is no auditing of labour standards in the supply chain.

5%

0%

5.3 Public disclosure of manufacturing sites The company has publicly disclosed the names and addresses of all of the facilities producing its own branded goods and those of any subsidiary brands owned by the company.

100%

The company has publicly disclosed the names and addresses of all of the facilities producing only its own branded goods.

66.7% 10%

The company has publicly disclosed the names and addresses of a portion of the facilities producing its own branded goods. The company has not publicly disclosed the names and addresses of the facilities producing its own branded goods.

33.3% 0%

5.4 Transparency of the labour standards auditing methodology The supply chain labour standards auditing methodology is publicly available and follows generally accepted practices and/or at least one explicit external standard. The auditing methodology is not publicly-available and/or is not grounded in a generally accepted practice and/or external standard, or there are no audits of labour standards in the supply chain.

100% 15% 0%

TRANSPARENCY REPORT II

13


Criteria: Supply chain auditing and reporting

Scoring

Weighting

5.5 External verification of labour standard audits There is third party involvement that includes systematic input from NGOs and/or labour in the country of supply into the verification of labour standard audits.

100%

There is third party involvement that includes ad hoc input from NGOs and/or labour in the country of supply into verification of labour standard audits, or it is unclear how systematic this involvement is.

66.7%

There is third party involvement in the verification of labour standard audits, but there is no input from NGOs or labour in the country of supply.

33.3%

There is no external verification of supply chain labour standard audits.

20%

0%

5.6 Reporting the results of audits of labour standards in the supply chain There is full and complete disclosure including quantitative analysis of audit findings at the factory or supplier level.

100%

There is some disclosure and analysis of audit findings at a factory or supplier level.

75%

There is full and complete disclosure and quantitative analysis of aggregate audit findings.

50%

There is broad commentary on aggregate audit findings, but no figures are disclosed.

25%

There is no discussion of audit findings.

20%

0%

5.7 Dealing with non-compliance There is a policy for handling instances of non-compliance with the code, and this policy includes a staged approach to dealing with violations.

100%

There is reference to handling non-compliance with the code. Details of how this is handled are given, but there is no indication of a staged approach to dealing with violations of the code.

66.7%

There is reference to handling non-compliance with the code, but there are no details of the approach used.

33.3%

There is no mention of dealing with non-compliance with the code.

14

0%

15%


Findings

Research Findings

Many of the companies that did receive a score this year are not yet providing sufficient, credible and

Below is a summary of the overall findings from this year’s

verifiable information to consumers or shareholders

research. Please note that complete report cards for

to allow informed ethical choices. However, some

those companies that achieved above a zero score are

compare favorably with the level of disclosure seen

included in the Individual Company Report Cards section

in more mature markets such as Canada (see Table

of this report. While reviewing company scores, please

4 below). The notable example is Esquel Group,

keep in mind that they reflect the level of transparency of

which has shown a commitment to and leadership in

reporting and not actions being taken by companies on

improving the transparency of its ethical supply chain

labour standards in the supply chain. For example, over

operations as evidenced by the high score it achieved.

the course of this research, we found that many of the

This is highly impressive given that Esquel Group is a

top performers had internal policies and management

private company and has made such progress on its

systems in place before they began publicly reporting on

own initiative.

their supply chain practices. In addition to Esquel and those companies taking part in The findings show that some leading companies showed

the garment roundtable, Glorious Sun, Chickeeduck and

heightened interest and response to the research. More

Hembly have engaged with Oxfam Hong Kong and CSR-

companies showed concern about the research and

Asia during the research period. It is revealed that these

engaged with Oxfam and CSR Asia to better understand

three companies have some good practices in place,

the research criteria and how to cooperate with the

which are not fully reflected in their public reporting at

research. This indicates a shift towards awareness about

this time.

the need for information disclosure on ethical supply chain practices and of how transparency can impact the business. Based on the heightened level of interest, it looks likely that reporting will become a trend among the more socially responsible companies in Hong Kong in the near future.

TRANSPARENCY REPORT II

15


Table 3: Overall Company Scores Company Name

market. Of the 30 companies surveyed in 2006/07,

Total Score (%)

than 50 points. Eight scored zero points. Most of the

Esquel Group of Companies

70

top performers have been previous targets of high-

Li & Fung Limited

33

profile public anti-sweatshop campaigns by consumers,

Glorious Sun Enterprises Limited

32

investors, trade unions and NGOs. It was concluded that

Esprit Holdings Limited

19

Giordano International Limited

13

Table 4: Scores of retailers and brands

Chickeeduck

10

selling clothes in the Canadian market

Hembly International Holdings Limited

3

in 2006/07

Bauhaus International (Holdings) Limited

0

Belle International Holdings

0

Bossini International Holdings Limited

0

Crocodile Garments Limited

0

Dickson Concepts (International) Limited

0

Fashion Community Kitterick (F.C.K)

this was a decisive factor in their high score.

Company Name

Total Score (%)

Mountain Equipment Co-op

74

adidas Group

73

Gap Inc.

71

Levi Strauss & Co

69*

Nike

68

0

H&M

64

G2000 (Apparel) Limited

0

Eddie Bauer

63

Gay Giano International Group Limited

0

Liz Clairborne

62

Goldlion Holdings Limited

0

Zara (Inditex)

49

Heroic Rendezvous

0

Hudson’s Bay Company

48

I.T Limited

0

American Eagle Outfitters

40

Moiselle International Holdings Limited

0

Wal-Mart

40

PMTD Limited

0

Mark’s Work Wearhouse

39

Texwinca Holdings Limited

0

Winners (TJX)

36

Toppy International Limited

0

Roots

27

U-Right International Holdings Limited

0

La Senza

23

Veeko International Holdings Limited

0

Lululemon

18

YGM Trading Limited

0

Sears

8

Young Grace International Limited

0

Northern Group

6

Reitmans

6

Polo Ralph Lauren

5

To provide a context for these results and to serve as a comparison, listed below are the scores of 30 North American companies operating in the Canadian market also ranked according to the Gradient Index. However,

* Levi Strauss & Co’s score was downgraded from 78 to 69 in January 2007.

please note that because the weighting scale of the Hong

* Reebok has been removed from the above list because it has since been acquired by the adidas Group.

Kong research has been slightly modified, this serves more as an indicative comparison against a more mature

16

only eight (please refer to Table 4 below) scored more

* Companies scoring a zero score include: Boutique Jacob, Forzani, Grafton-Fraser, Harry Rosen, International Clothiers, Le Chateau, Tristan & America and YM Inc.


Of the Hong Kong apparel companies in this year’s

Esquel

study, only Esquel Group compares favourably with the top company scores in the Canadian market.

As a major Hong Kong supplier, Esquel directly

The remainder all scored below 50. This disparity in

manages 15 garment manufacturing facilities worldwide

performance levels is a clear indication of the significant

and is in a better position to exert direct control over

gap between the market demands in Hong Kong and

the ethical standards of its supply chain. Esquel is

those of more mature markets. Currently, Hong Kong

currently further strengthening its internal systems

apparel companies are facing limited or no market and

around ethical supply chain management and aims to

consumer pressures for increased transparency of their

complete the establishment of a robust internal system

supply chain practices. However, several companies

before expanding its public reporting of supply chain

are beginning to feel increased pressure from investors

and CSR practices. The interview summary aims to

and clients about their supply chain labour practices.

supplement the information already provided on Esquel’s

It is inevitable that these and other pressures will become

corporate website.

more evident over time as Hong Kong apparel brands grow and expand beyond Asian markets, and as local

At Esquel, there is board-level responsibility for ethical

stakeholders such as consumers become more aware

issues in the supply chain. In addition to the CSR

and demanding of ethical business practices. Action will

department’s accountability to the company’s Vice

also be spurred by leading companies like Esquel Group

Chairman and CEO, the Director of Internal Audit reports

raising the bar on responding to the issue. The question

directly to the Board. The Internal Audit department is

is no longer if but when.

responsible for conducting human resource audits in manufacturing facilities to ensure compliance with local

Supplementary Interviews

labour regulations and Esquel policies and procedures.

In this research, the core participants of the garment

To further improve the effectiveness of Esquel’s social

roundtable were given the opportunity to provide

compliance program, the work of the CSR Director

supplementary information about their supply chain

and Internal Audit Director is being aligned. This

labour practices. Several leading Hong Kong apparel

integration aims to address labour issues more

brands were open to this option and have participated in

proactively when allocating resources to target potential

interviews with CSR Asia. Although Esquel Group is new

risks in Esquel’s six countries of manufacture. An

to the research and not yet a part of the roundtable, as

informal risk assessment exists, which ranks countries

the top performer in our rankings they have also been

according to the level of potential risk associated with

given the opportunity to be interviewed. The following

their labour standards.

section provides a summary of the interviews conducted, which provide some useful insight into the attitudes of

Operations management is involved on a quarterly

Hong Kong companies towards transparency and the

basis in reviewing and commenting on supply chain

steps they are already taking to improve the ethical

labour issues. To closely link operations staff to the

performance of their supply chains. Please note that

CSR department, senior management has planned a

these are the companies’ own statements and not Oxfam

headcount increase of management-level CSR staff.

Hong Kong’s assessment of their programmes. The

The restructuring will add a more senior CSR role inside

information disclosed here was not taken into account

the factory, reporting to the CSR department based in

when compiling the company’s score unless it was

company headquarters. This strategic realignment aims

publicly available during the course of this research.

to ensure adequate oversight of the achievement of Esquel’s labour standards.

TRANSPARENCY REPORT II

17


To better understand the labour challenges faced by

Esprit

its factories, Esquel engages on labour issues with stakeholders in its countries of operation. Esquel sees

Esprit Holdings Limited is the largest apparel brand in

the value in reaching out to local groups and hearing

Hong Kong, with an annual turnover of around HK$ 30

their views about labour risks. NGOs have provided

billion in 2007. Esprit is listed on the Stock Exchange

input to Esquel’s social compliance system through

of Hong Kong Limited, and is a constituent stock of the

factory audits, which have been performed by the

following indexes: Hang Seng Index, MSCI Hong Kong

Fair Labor Association (FLA) and Verité. Verité has

Index, FTSE All-World Index for Hong Kong, S&P/HKEx

also conducted factory training in their factories on

LargeCap Index and S&P Asia 50 Index. It is one of the

labour issues.

few Hong Kong listed apparel companies operating in the international markets. The company has over 13,000

Esquel is one of the few Hong Kong apparel companies

wholesale outlets in more than 40 countries, including

to adhere to the CSC9000T standard. It implements this

about 604 company-owned and franchised stores. This

supply chain management system not only in its China

global exposure has been a key factor in shaping its

factories but also has similar systems at its factories

supply chain standards and practices over the years.

in all countries of operation. Esquel has also recently become a participating supplier of the FLA who will also

The driver for Esprit’s supplier management system

oversee Esquel’s internal oversight system. As a part of

was an assessment by KPMG done in 2003 highlighting

this process, internal audits are regularly planned and

that this was an area of improvement for the company.

are already in process for 2009. Esquel also accepts

That year, Esprit issued its Vendor Compliance Program

and relies on the results of third-party audits, most of

internally to improve on social compliance in its Far East

which are performed by its multinational brand clients

Asia operations. In 2007, the programme was rolled

or their chosen auditors. Although subject to the social

out globally, demonstrating a commitment to continued

requirements of its clients, Esquel has developed its own

improvement. Today, Esprit is an active member of

code of conduct to better instill its social values across

the Business Social Compliance Initiative (BSCI), a

its operations. The company is also planning to establish

leading business platform for the improvement of social

key performance indicators to measure the accountability

compliance in the supply chain. Esprit sits on the BSCI

of managers in ensuring Esquel’s labour standards

Board of Directors and influences good practice, striving

are achieved.

for policies that go above and beyond the status quo. The company has made this area a priority for their

Esquel works closely with its factories using a staged

business, demonstrating integrated internal policies,

approach to identify the root causes of labour issues,

procedures and management system.

and implement solutions that can systematically solve

18

them. Any serious labour issues are brought to the

Esprit has assigned Board-level responsibility for

attention of senior management. Esquel has a strong

managing ethical issues in the supply chain. The

business incentive to mitigate such issues as they affect

Manager of Global Sourcing Compliance reports directly

staff morale and turnover, and create customer concern.

to the Chief Operating Officer. Esprit’s Code of Conduct

Esquel also plans to develop and add more information

is the Sourcing Compliance Policy, which is based on the

about its supply chain management on its corporate

Business Social Compliance Initiative (BSCI) Code of

website with a view to further their sustainability reporting

Conduct and covers all International Labour Organization

in the future.

(ILO) core conventions on labour standards. The


Sourcing Compliance Policy is written into Esprit’s Buyer

a factory has been reactivated as a supplier following

Agreement to ensure full integration with its business

suspension, the current contract will be terminated.

practices. It applies to the entire supply chain as well as procurement.

Giordano

The purchasing process adheres to the Sourcing

Giordano International Limited is one of Hong Kong’s

Compliance Policy. When an Esprit buyer places an

largest apparel brands, with an annual turnover of nearly

order, it goes through a compliance procedure that

HK$ 5 billion in 2007. The company has been listed on

involves background checks of the supplier. To ensure

the Hong Kong Stock Exchange since 1991 and has

its standards are effectively implemented across its

over 1,800 stores and ‘points of sale’ in 30 markets in the

operations, Esprit carries out staff training on labour

Asia-Pacific and Middle East. Expanding internationally,

standards in the supply chain. There is annual training

the chain recently opened its first stores in Egypt,

for buying agents and factory management personnel.

Russia, and the US (in Los Angeles). This increased international exposure has resulted in more interest by

Esprit views labour standards issues in the supply

investors in the company’s performance, including its

chain as a risk factor and defines substantial critical

supply chain labour standards.

violations (e.g. child labour) in its Vendor Compliance Manual. The Manual includes a policy committing Esprit

Giordano has Board-level responsibility for ethical issues

to audit of labour standards across its entire supply

in the supply chain, although it doesn’t make the link

chain operations. This was implemented in the previous

between senior management and social compliance in

years and has been scheduled for 2008. To facilitate

the supply chain explicit in its public reporting. Giordano’s

continuous risk analysis of labour issues across the

Risk Management Committee, which is composed of five

supply chain in its production countries, a monitoring

members including one Executive Director, the Group

database tracks vendor performance by region and

Chief Financial Officer, the Head of Internal Audit and

provides a quantitative analysis of aggregate audit

two senior management representatives, is responsible

findings. The database is updated semi-annually and

for the Group’s internal control system. Supply chain

identifies critical labour issues by country. Based on

issues related to compliance with labor laws are

these reviews, Esprit updates its sourcing policies to be

considered a risk factor by the Group and are included in

responsive to non-compliance issues in the future.

its internal control system. Risk analysis of ethical issues in the company’s supply chain is conducted twice a year

Auditing is based on BSCI’s auditing methodology. If a

by this Committee, which reports to the Board, to which

violation is identified, the supplier is given a grace period

it is fully accountable.

of up to 18 months to comply with Esprit’s standards, during which time the factory is suspended from being a

The company’s social compliance team comprises

supplier for Esprit. The grace period allows the factory a

the General Manager, Internal Audit Director, Quality

fair chance to resolve any non-compliance issues. This

Assurance Manager, and Corporate Communications

is because Esprit’s auditing approach is not compliance-

and Investor Relations Manager. The Quality Assurance

driven, which results in companies policing their supply

Manager is the front line of defense against social non-

chains. It is based instead on engagement with the

compliance in the supply chain and is responsible

supply chain and aims to build long-term business

for performing audits and monitoring, and guiding

partnerships. However, if an offence occurs again after

improvement. The Internal Audit Director acts as

TRANSPARENCY REPORT II

19


the second line of defense and monitors higher-

Giordano’s auditing methodology is based on Worldwide

level developments such as the Labour Contract

Responsible Accredited Production (WRAP) and Social

Law and its implications for Giordano. The Corporate

Accountability 8000 (SA8000). The company’s wholly-

Communications and Investor Relations Manager

owned subsidiary manufacturers are certified according

works closely with this group, which reports to the

to these standards.

General Manager. Although labour standards in the supply chain are not the General Manager’s primary

The results of labour standard audits are reported

responsibility, these are an important part of his overall

internally to the Risk Management Committee. A

risk management responsibility. The company’s Legal

termination clause is written into supplier contracts for

and Secretariat departments are also involved in issues

cases of non-compliance. If suppliers don’t meet the core

around social compliance in the supply chain.

requirements of the Core Ethical Sourcing Requirements, Giordano may choose not to re-audit and may proceed

Giordano’s code of conduct is its Core Ethical Sourcing

with terminating the contract. If Giordano observes a

Requirements, which is published in the Corporate

lack of commitment toward compliance from the supplier,

Governance section of its Annual Report. Giordano’s

termination will begin.

Core Ethical Sourcing Requirements prohibits child labour, forced or prison labour, harassment and abuse of

The Group is currently not reporting on these actions

workers, and covers health and safety, the environment

because it never saw a need for disclosing this

and compliance. The Group considers the Core Ethical

information explicitly. However, it is considering improving

Sourcing Requirements as the minimum requirements

its transparency and its supply chain standards. For

to be complied with by suppliers. Additionally, the Group

example, it has indicated openness to Oxfam Hong

has general requirements which outline that suppliers

Kong performing an assessment of its supply chain

must be in compliance with local labour legislation.

operations, to disclosing more details of their wholly-

The Group operates on the assumption that ensuring

owned manufacturing facilities, and to considering

compliance with local labour laws should be sufficient in

publicly sharing an aggregate overview of audit findings

achieving acceptable labour standards.

in the future.

A key highlight of Giordano’s supply chain management

Trends among smaller Hong Kong apparel brands

is the integration of compliance and purchasing through the company’s Quality Assurance team and Central Sourcing team working closely together. The

Esprit and Giordano are unique models in the Hong

collaboration includes vendor training for buying agents

Kong apparel industry sector due to their high turnover

in the Central Sourcing team. Giordano also holds

and/or broad market exposure. More representative of

seminars for factory management personnel in order to

the local market are companies like Moiselle and U-Right.

promote compliance with its standards.

These brands are significantly smaller-scale and are currently focused primarily on local consumers. Some of

20

Giordano’s Core Ethical Sourcing Requirements refer

these are former family enterprises, some still consider

to supplier audits taking place to ensure standards are

themselves SMEs, and some have only recently begun

being met. The Quality Assurance Manager conducts

listing publicly and have to adapt to new compliance

audits of ‘high risk’ suppliers annually and ‘low risk’

requirements such as increased transparency on

suppliers biennially. Auditing is an ongoing process.

corporate governance.


The lack of global renown has placed these brands in

and for selecting suitable suppliers. Risk analysis

a comfort zone free of external stakeholder pressures.

is performed while selecting new suppliers. This

They have not yet experienced scrutiny over their supply

assessment involves collecting references from the

chain practices from key stakeholder groups such as

factory’s business partners, large brands and reputable

consumers, investors or the media and therefore, do not

companies.

currently see a business need for addressing the social compliance of their suppliers. In effect, they do not have

Based on a set of minimum criteria, they review potential

explicit policies, personnel or management systems in

suppliers, which are directly approved by the General

place to ensure compliance with labour standards across

Manager. Although no policy exists defining the minimum

their supply chains.

requirements for selection of new suppliers, the General Manager’s experience plays a vital role in ensuring that

However, they are becoming increasingly more aware

high quality suppliers are selected. If the team finds

that this is an area that sooner or later will have to be

improper practices (including environmental or labour

given a higher priority. Ethical supply chain performance

issues), the supplier is not considered to be able to

and corporate social responsibility are still relatively

produce quality products and will not be selected as

new concepts for these companies. A positive step has

a business partner. There is no monitoring of supplier

been the willingness and interest of Moiselle, U-Right

labour standards after they have passed the selection

and Goldlion to participate in the garment roundtable on

process. The Chairman has regular meetings with the

improving knowledge of CSR and transparency, which

Department of Design and Production to check on issues

was initiated following the first Transparency Report. The

related to procurement and purchasing.

interviews that were conducted with Moiselle and U-Right offer some insight into the practices and attitudes

Non-compliance with the law, especially regarding

surrounding labour issues in the supply chain, which are

employment, is considered a risk factor. Due to the

likely to be shared by other Hong Kong apparel brands.

relatively small size of the company and its vertical integration, it is able to ensure legal compliance

Moiselle

with labour standards (i.e. Labour Contract Law in the PRC) for its own facilities such as offices, shops and

Moiselle’s three wholly-owned manufacturing facilities in

its three factories, which account for the vast majority

the PRC supply 60% of its sales volume. The remaining

of output.

40% is outsourced. Moiselle is not a mass producer and requires a high level of performance, flexibility and skill

Moiselle will cut a contract if the supplier is found to be

from its external suppliers. The company considers itself

non-compliant with local law, which includes labour laws.

very choosy when selecting new business partners and

However, this is driven by the risk of losing expensive

considers legal compliance, which includes labour law,

inputs like material provided to a factory if it is shut down

as part of the package.

or penalised by local government authorities.

Although there is no explicit organisational responsibility

The business case for addressing ethical performance in

for the ethical performance of the supply chain, there

the supply chain is not apparent to Moiselle at present.

is some relevant involvement of the procurement

As a licensee for Walt Disney Company, Moiselle’s

and purchasing staff. The Department of Design and

production facilities have been subjected to Disney’s

Production is responsible for procurement, purchasing

Code of Conduct and auditing process.

TRANSPARENCY REPORT II

21


U-Right

adapt quickly to a new market trend. This should alert Hong Kong apparel brands to keep CSR initiatives on

U-Right outsources most of its supply chain capacity.

their radar to monitor new market dynamics. In the short-

Unlike Moiselle, only 8-10% of its production volume

term, Hong Kong brands admit they know little about

is produced by wholly-owned manufacturing facilities.

CSR and do have an interest in learning more about

Despite having significant exposure to external suppliers,

how it relates to their business. This includes gaining

the company didn’t consider labour as a risk factor

an understanding of industry best practice, especially

until the enactment of the Labour Contract Law in the

on companies sourcing in China and on the tangible

PRC. Legal impetus has so far driven U-Right to ensure

benefits of CSR and improved transparency.

compliance in its own factory. U-Right has identified a supply chain challenge facing many Chinese companies that are considering improving their labour practices. They believe that improving supply chain labour standards correlates with an increase in costs. They feel that foreign brands are in some cases hypocritical in terms of pressing suppliers for bargain basement prices, while pushing for higher labour standards using their demanding codes of conduct requirements.

Future outlook Although many Hong Kong apparel brands don’t see the business need to act now on labour issues in the supply chain, they believe that the topic will become important for their business in the mid- to long-term. In three to five years, they expect the Hong Kong market will begin facing more compliance pressures from key groups such as consumers. They are also becoming aware that future expansion to new markets and listing on foreign exchanges will inevitably bring upon them increased pressure to focus on social compliance in the supply chain. Until then it may be difficult to convince senior management to allocate the budget and the resources necessary to implement an effective strategy for improving the social responsibility of their supply chain operations. Interim piecemeal improvements may include expanding corporate governance reporting to include corporate social responsibility or disclosing information about their wholly-owned production facilities. It is noteworthy that these brands care about their corporate image and will

22


New Trends in Sustainability Reporting and Sustainable Supply Chains New Trends in sustainability reporting among leading international brands 5

and the steps it is taking to address it, as well as setting precise targets for completion, represents a step forward for CSR reporting.

Over the past three years, leading companies have begun reporting more about the root causes of persistent non-compliance and poor audit results, as well as identifying changes in their approach to achieving and

Training programs for factory management and workers 7

maintaining labour standards compliance based on

There is also a growing appreciation that calling for CSR

these analyses. In its FY05-06 Corporate Responsibility

in the supply chain is not feasible unless factories have

Report, Nike acknowledges that:

adequate management systems in place to ensure they meet standards. Since the discussion of root causes in

“In Generation I we set standards. In Generation II

company CSR reports has tended to focus on persistent

we developed tools and methods to monitor those

factory-level problems, it is not surprising that the

standards. Each generation was a stepping stone to

solutions proposed by brand buyers have emphasised

the next and delivered vital learning and experience

training for and engagement with factory management

for all stakeholders… Generation III is what we

to improve HR practices, materials management and

call responsible competitiveness. While monitoring

productivity. Consequently, discussion of training

continues to be a cornerstone of our approach, we

programs, as well as engagement with local labour and

are taking a broader, more holistic look at our supply

non-governmental organisations, has been given more

chain, focusing on root cause identification and

prominence in recent CSR reports, which is a positive

solutions that will drive systemic change.”

6

trend.

Nike, for example, outlines what it believes are some

Gap’s latest CSR report includes a map of the world

of the root causes of excessive overtime hours within

identifying the initiatives and projects in which it is

their supply chains and sets out plans to eliminate

engaged in each country, which helps stakeholders

excessive overtime in its contract factories by 2011

visualise the extent to which the company has committed

using a combination of approaches. It is recognised that

to engagement and training across its supply chain.8 One

outlining the company’s understanding of the problem

strong focus for training programs in the coming years

TRANSPARENCY REPORT II

23


appears to be freedom of association and collective

workers’ rights training and worker hotline services in

bargaining, known as “enabling rights” because they

industrial areas. They run pilot projects including building

provide workers with the ability to enforce compliance

worker committees/communication mechanisms in

with labour standards. While many reports on training

supplier factories in southern China. It appears that the

are at best a listing of activities, Gap goes further by

brands’ programmes will be increasingly effective if they

reporting some measurable results from its training

include a worker empowerment component and draw

programmes. The move towards more open reporting on

on the unique skills, networks and credibility of NGOs,

results rather than events, as well as clear information

unions and community groups.

on how training results are being measured, should be encouraged.

Worker empowerment projects between brands and NGOs in China

Beyond monitoring: a new vision for sustainable supply chains There is now a widely held belief that auditing supplier workplaces has limitations for improving workers’

The first generation of efforts to ensure fair working

conditions. Challenges such as under-skilled auditors,

conditions often involved workers secondarily, and

the limitations of private monitoring, the lack of a rigorous

was merely a top-down approach from buyers. Where

certification process, and bribery and corruption issues

brands’ approaches to worker empowerment once

of auditors call for other approaches to ensure ethical

consisted solely of translating codes of conduct into local

working conditions in supplier workplaces.

languages and making those available to workers, civil society is calling for a bottom-up approach and to include

While auditing is still important, without which companies

workers at the heart of monitoring programmes.

would not be able to identify problems, more voices are calling on multinationals to move beyond monitoring

It is believed that workers know their problems and

or policing the supply chains. Business for Social

welfare needs best. An emerging trend is to include

Responsibility has elaborated in its paper “Beyond

workers in factory decision-making processes relating

Monitoring” a new approach that is designed to

to workplace practices. This includes establishing

address the root causes of social and environmental

systems by which workers can air grievances to which

shortcomings in global supply chains. They encourage

management must respond. Pilot programmes recently

companies to pursue a four-part integrated approach

created between brands and NGOs include installing

that has potential to achieve more lasting change.

labour helplines in factories that produce the brands’ products. These helplines are operated by independent

1. Buyer Internal Alignment of purchasing practices

NGOs such as the China Labour Support Network to

with social and environmental objectives. It is widely

take workers’ complaints independently and to enhance

agreed that greater collaboration between functions

the capacity of workers. They also run a mobile van and

overseeing social compliance and purchasing is an

associated occupational health and safety programmes

essential way to overcoming current barriers.

to deliver services and education to a large number of migrant workers at the industrial areas in Guangzhou.

2. S u p p l i e r O w n e r s h i p of good working and environmental conditions in their workplaces. This is

24

Other NGOs like Labour Education and Service Network,

most likely to be achieved through a basic bargain

the Chinese Working Women Network, and Qingdao

where suppliers assume greater responsibility for

Xiaochen Hotline Center are also actively involved in

managing their workforces consistent with global


expectations, and buyers provide greater security for

a result of collaboration – shared information, shared

ongoing business relationships.

best practices, leveraged resources and more effective coverage of supply chains within our industry.” Two

3. Empowerment

of Workers who take a stronger

years on, they add, “we have realized no competitive

role in asserting and protecting their own rights.

disadvantage from bringing greater transparency to our

This will develop through an increasingly informed

supply chain.” 10

and participatory workplace, with access to secure communications channels, effective means of raising and resolving disputes, and opportunities for skills development.

Footprint Chronicles – a social and environmental impact tracking system Patagonia has made strides in corporate transparency

4. Public Policy Frameworks that ensure wider

and accountability through its Footprint Chronicles,

and more even application of relevant laws. In many

which is a CSR/social and environmental impact tracking

contexts, enforcement of labour laws has de facto

system. The Footprint Chronicles is a website that tracks

been left to private actors. Emerging models of public-

and discloses “the good and the bad” in Patagonia’s

private partnerships and an increased appreciation by

supply chain. This system exposes the problems

global business of the importance of effective public

uncovered in the supply chain to enable its customers to

governance as a pre-condition for economic growth

create solutions.

offer interesting new pathways to progress.

9

This approach draws on earlier efforts of companies

Disclosure of names and addresses of supplier factories

to improve the transparency and accountability of their supply chain operations. These efforts included disclosing code of conduct violations, disclosing the

On April 13, 2005, Nike became the first major brand

environmental and community impacts of products on

to publicly disclose its global supply chain for Nike-

the packaging (like nutrition labels on food), disclosing

brand products. Since then, Levi Strauss, Timberland,

climate impacts, chemicals used and res ource

adidas and Puma have followed suit by also disclosing

consumption associated with products.

their supply factory locations. In Hong Kong, a few companies are disclosing the names and addresses of

The Footprint Chronicles provides transparency – by

their wholly-owned manufacturing facilities; however,

disclosing information about its manufacturing operations

there is still a degree of sensitivity around disclosing

impacting on CSR, and accountability – by identifying

what is considered to be competitive information.

weaknesses and non-compliance in its supply chain

Supply factory lists are a useful check on a company’s

for public scrutiny. In so doing, it is creating the next

claims and add credibility to a company’s efforts to

generation of transparent and accountable business

achieve labour standards compliance, since they open

practices. The Footprint Chronicles can be accessed

up company supply chains to scrutiny by stakeholders

through the following link:

and encourage cooperation on compliance issues

http://www.patagonia.com/usa/footprint/index.jsp

among buyers in shared factories. In its most recent CSR report, Nike has included a full list of factories that manufacture its products, complete with addresses. Nike argues that, since they first disclosed factory locations two years ago, the company is “seeing successes as

TRANSPARENCY REPORT II

25


Box 4: Useful Resources

GRI Apparel and Footwear Sector Supplement

Remediation • Remediation practices to address non-compliance findings

The Global Reporting Initiative (GRI), the foremost global authority on sustainability reporting, recently released the Sustainability Reporting Guidelines & Apparel and Footwear Sector Supplement, which tailors the G3 Reporting Guidelines to the apparel industry and provides new sector-specific indicators to provide additional guidance to apparel companies’ public disclosure on CSR. The new sector-specific category, “Supply Chain Standards and Practices" includes the following management disclosures and performance indicators:

Grievance Procedures • Policy and procedures for receiving, investigating, and responding to grievances and complaints

Capacity Building • Strategy and scope of efforts to strengthen capacity of management, workers and other staff to improve in social and environmental performance

Business Integration • Policies for supplier selection, management, and termination • Actions to identify and mitigate business practices

Code of Conduct

that affect code compliance

• Code of conduct content and coverage • Number and location of workplaces covered by code of conduct

The Sector Supplement also indicates 17 new apparelspecific indicators for the Social and Environmental categories in response to the intensified focus on

Audit Process • Parties and personnel engaged in code of conduct compliance • Compliance audit process • Number of audits conducted and percentage of workplaces audited

working conditions and environmental practices throughout the supply chain. These include new specifications for materials, energy, emissions, effluents and waste, products and services, employment, wages and hours, diversity and equal opportunity, labour/management relations, occupational health and safety, nondiscrimination, abolition of child labour, community

Non-Compliance Findings

investment and public policy.

• Incidents of non-compliance with legal requirements or collective bargaining agreements on wages • Incidents of non-compliance with overtime standards • Incidents of non-compliance with standards on pregnancy and maternity rights • Incidents of the use of child labor

In addition to the standard disclosures, the added sectorspecific indicators bring the total to 34 performance indicators in the following four categories: Supply Chain Standards and Practices, Economic, Environmental and Social.

• Incidents of non-compliance with standards on gender discrimination

The Sector Supplement takes into account the diversity

• Incidents of non-compliance with code of conduct

of size, structure and functions of organisations in the

• Analysis of data from code compliance audits

apparel and footwear sector; most items apply to both manufacturing organisations (i.e., organisations that

26


own or operate one or more manufacturing facilities) as

and opportunities as seen by the suppliers as well as

well as non-manufacturing organisations (e.g. brands

the multinationals that have participated in the project.

that do not own or operate manufacturing facilities). It

Please visit their report at http://www.globalreporting.

also provides recommendations to beginner reporters

org/NR/rdonlyres/02AF6322-C207-4F79-85B2-

or SMEs on how each performance indicator could

EC017826B60F/0/SSSReport.pdf

be applied in an incremental manner. This is done by marking “do-ability criteria” which are: 1 – Feasible to

One of the key benefits for global network members

report for most and would be at the entry point for new

will be the opportunity to take part in GRI-certified

reporters, 2 – Normative and would be at a medium

training in disclosure on key sustainability indicators

do-ability level, and 3 – Likely to be included in reports

for multinational firms’ suppliers. “We are convinced

by best reporters, but challenging in terms of data

that only by bringing about transparency throughout

collection and would not be expected to be reported by

the supply chain can companies fully understand and

new reporters.

work towards dealing with very serious risks not only to the environment and society, but to brand reputation,”

If Hong Kong apparel companies are to adhere to the

said Nelmara Arbex, Director of Learning Services at

Sector Supplement, they would simultaneously improve

GRI. In the coming months, a new GRI publication

their Transparency Report score by a wide margin.

will be launched outlining a step-by-step approach to sustainability reporting for SMEs in the supply chain.

Please visit the pilot version of the Sustainability R e p o r t i n g G u i d e l i n e s & A p p a r e l a n d F o o t w e a r Sector Supplement at http://www.globalreporting.

Maquila Solidarity Network

org/NR/rdonlyres/AFC0B47C-AA2B-4E5A-B108-

Maquila Solidarity Network (MSN) is the secretariat of

780C46A46399/0/AFSS_Pilot.pdf

the Ethical Trading Action Group (ETAG), a coalition of NGOs, trade unions and faith groups in Canada

GRI Global Action Network for Transparency in the Supply Chain

advocating improved labour practices based on international labour standards. ETAG, in association with AccountAbility, published the original Transparency

As problems in international companies’ supply chains

Report Card for the Canadian market – on which this

continue to come under the spotlight, Amsterdam-based

research is based – in 2005, and a follow-up version in

Global Reporting Initiative announced the launch of

2006. It is a good source of research and publications on

the GRI Global Action Network for Transparency in the

labour issues and standards in global supply chains.

Supply Chain in July 2008. Through this initiative, the GRI is calling on multinational firms to take the lead by

MSN’s 2006 Transparency Report Card: Revealing

promoting sustainability in their supply chains through

Clothing evaluated 30 top apparel brands in the

greater transparency in disclosing their economic,

Canadian market (listed in the Research Findings

environmental and social performance.

section above) and revealed an improvement in their scores since the initial 2005 report. The 2006 report

To mark the launch of the global network, GRI has

added the following two new criteria: Worker and

published Small, Smart and Sustainable. The publication

third party complaints and Rewards and incentives

shares the experiences of companies in the global

for compliant suppliers. Please visit their report at

supply chain from six developing countries including

http://en.maquilasolidarity.org/en/issues/ca/transparency/

India, China and Thailand. It captures the challenges

TRC/2006

TRANSPARENCY REPORT II

27


Conclusions and Recommendations Conclusion

Furthermore, in some countries, CSR reporting has

So, have Hong Kong garment companies improved

companies of Sweden are required to produce sustain-

their reporting on labour standards? This research has

ability reports based on GRI Guidelines. In the UK, the

shown that although there has not been a marked overall

updated Companies Bill was passed in November 2006,

improvement in actual reporting on supply chain social

requiring companies to take responsibility for areas

compliance, more leading Hong Kong garment retail

such as environmental performance, employees, social

companies are taking this issue more seriously and are

and community matters and to disclose information on

in the process of putting practices, systems and internal

their main suppliers. In the United States and France,

communications in place before they progress towards

environmental disclosure requirements have been

public reporting.

established for listed companies. In Japan, specified

become mandatory. Starting in 2009, all state-owned

corporations have been required to publish an annual Compared with other stakeholders of Hong Kong

environment report since 2005. In 2008, it became

apparel brands, the Hong Kong Exchanges and Clearing

mandatory for publicly listed companies in Malaysia to

Limited (HKEx) is the most influential. During interviews,

disclose their CSR activities in annual reports.

companies implied that if improved transparency was required by HKEx, they would certainly respond. Some

A few of the larger companies are beginning to feel

apparel companies have already urged Oxfam Hong

pressure from investors about their social compliance.

Kong to approach the HKEx to begin providing more

They find that they are fielding more and more

guidance for companies wanting to report on CSR.

requests about supply chain practices from institutional

This is already happening in Mainland China where the

investors, socially responsible investors and NGOs.

Shenzhen Stock Exchange encourages publicly listed

The publication of information about their supply chain

companies to adopt the Global Reporting Initiative (GRI)

practices in regard to labour and environment issues

reporting standards. In January 2008, the State-owned

would serve as a central reference for these types of

Assets Supervision and Administration Commission

inquiries, saving staff time and presenting a consistent

(SASAC) of the State Council published guidelines to

official company view. The longer-term benefit, of

encourage State-Owned Enterprises to embed corporate

course, is an improvement in competitiveness not only

social responsibility into their practices and establish a

locally but globally.

CSR reporting system.

28


Speaking with Hong Kong apparel companies, many

Commit to responsible labour standards in the supply

of which are suppliers of globally renowned apparel

chain at the highest level of corporate management

brands, have proven again that clients’ purchasing

and ensure that an understanding of these standards

practices contribute to poor supply chain labour

and the benefits of insisting on high standards are

practices. There is consensus that a major obstacle

integrated throughout the company.

to ethical supply chain practices is the price squeeze being felt by suppliers from large multinational apparel

Assign overall responsibility for labour rights in the

clients parallel to increasingly stringent supplier codes

supply chain to senior management and ensure that

of conduct requirements. Oxfam Hong Kong has

the Board of Directors also has a committee paying

highlighted this issue in its Turning the Garment Industry

attention to this important issue.

Inside Out: Purchasing Practices and Workers’ Lives report released in 2004. However, this key issue still needs to be addressed.

Adopt a code of conduct that applies the standards of ILO conventions and ensure it is done in a way which takes into account the particular problems and needs

There is a need for greater engagement with stake-

of women.

holders of all types, including companies, consumers, investors, HKEx, labour unions and NGOs, business

Engage with NGOs and labour organisations.

associations, workers and the public. Oxfam Hong

Facilitate workers’ rights training and worker

Kong believes that combined and complementary

complaint system at the factory level. Ensure that

policies and actions by various actors will be needed to

suppliers and workers are knowledgeable about

adequately address labour standards issues in global

their rights and responsibilities under the code and

supply chains. In the first Transparency Report, we

local law.

put forward a set of recommendations and we repeat some of these in the next section with some additions.

Join a credible multi-stakeholder initiative and

These recommendations will serve as a road map

collaborate with other companies, labour unions and

for better company reporting and labour standards

labour NGOs in seeking labour standards compliance

compliance in the supply chain. If fully implemented,

and long-term solutions to persistent industry

these recommendations would help set the stage for

problems.

collaborative action to eliminate workers’ rights abuses in global supply chains.

Recommendations to Hong Kong Apparel Companies

Recommendations to Multinational Apparel Brands Multinational apparel brands committed to social responsibility should acknowledge that their own

Provide transparent public reports to consumers,

sourcing and purchasing practices are some of

to shareholders and to civil society about progress

the root causes of poor labour standards. They

in labour standards in the company’s supply chains

should find ways to make respect for workers’ rights

and ongoing policies to improve them. Include these

integral to the company’s vision and integrate that

reports in companies’ websites. Consider adopting

commitment into sourcing and purchasing practices.

the GRI Reporting Guidelines and the Apparel and Footwear Sector Supplement in sustainability or CSR reporting.

TRANSPARENCY REPORT II

29


Recommendations to Consumers Urge Hong Kong apparel companies to provide

Council in encouraging publicly listed companies to establish a CSR reporting system and/or adopt the GRI reporting standards.

consumers with sufficient information on labour practices in their global supply chains and their efforts to improve those practices, for consumers to make ethical, informed choices when they shop.

Recommendations to the HKEx The HKEx should follow the positive steps of the Shenzhen Stock Exchange in encouraging publicly

Start to review buying habits and show concern for

listed companies to adopt the GRI reporting

the labour conditions of the products being made.

standards and expand information requirements

Share this report with friends and relatives and raise

for IPO prospectuses in the interest of providing

the labour issue in schools or workplaces. If you have

investors the kind of information required to make

a favourite label and you are not sure the product is

ethical investment decisions.

ethically produced, write to the companies and ask them about their labour rights practices. Express your opinion about ethical clothing and consumption to the media. Encourage Hong Kong garment companies to work with labour and non-governmental organisations to improve working conditions in apparel supplier factories and to tackle the root causes of persistent workers’ rights abuses in the industry as a whole.

Recommendations to Investors Work with other shareholders, institutional investors and stakeholders to persuade companies to improve their public reporting on supply chain standards and risk assessments of relevant issues in order to allow investors to track ethical progress and make better informed ethical choices. Socially responsible investors could play a valuable role in urging companies to enlarge the disclosure of environmental, social and governance (ESG) issues in their supply chain. Call on the HKEx and/or Government to follow the positive steps of the Shenzhen Stock Exchange and the State-owned Assets Supervision and Administration Commission (SASAC) of the State

30


Individual Company Report Cards

TRANSPARENCY REPORT II

31


Esquel group of companies Notes of Findings

Company Score

Question Weightings (% of section)

66.7

40

33.3

30

0

30

36.67

X 10%

100

60

100

20

100

20

100

X 20%

100

50

100

50

100

X 20%

1. Governance and Risk Management 1.1 Board-level responsibility for ethical issues in the supply chain - The CSR department reports to the Vice Chairman and one of Esquel’s external independent directors overseeing all company audit issues to ensure Esquel’s commitment and compliance with responsible business practices (http://www.esquel.com/en/index4.html).

1.2 Reporting of labour standards issues in the supply chain as a risk factor - The CSR department is also responsible for advising the CEO and other senior managers on risks inside our business related to the lack of adherence to international labor standards (http://www.esquel.com/en/index4.html).

1.3 Risk analysis of ethical issues in the company’s supply chain - No reported evidence Section total score / section weighting

2. Code for Labour Standards in the Supply Chain 2.1 Quality and score of the code for labour standards in the supply chain - Esquel commits to certify its factories under the Worldwide Responsible Apparel Production (WRAP) standards. It is also one of the first 10 factories in the textile and garment industry to publicly commit and support the China Social Compliance standard (CSC9000T) (http://www.esquel.com/en/index4.html).

2.2 Publication and availability of the code for labour standards in the supply chain - The WRAP Code of Conduct and CSC9000T are available to the public (http://www.wrapapparel.org/modules.php?name=Content&pa=showpage&pid=3, http://www.csc9000.org.cn/en/CSC9000T.asp?DID=233&DT=CSC900T%20Documents).

2.3 Application of the code for supply chain labour standards - At Esquel, we also expect our suppliers to share our commitment to operate in a legal and ethical manner and include this conversation in our business discussions. Our code of conduct covers the behavior of our suppliers, as well as all Esquel owned facilities (http://www.esquel.com/en/index4.html). Section total score / section weighting

3. Stakeholder Engagement 3.1 Membership of multi-stakeholders process - Esquel indicates that it is a Participating Supplier Affiliate of the Fair Labor Association (FLA) on its corporate website: http://www.esquel.com/en/index4.html

3.2 Engagement with NGOs and/or trade unions relating to labour standards in the supply chain - Esquel management engages in trade union discussions and negotiations through the formal independent trade unions existing in its Sri Lanka factories, the in house union at its Malaysia factory, the VCGL in Vietnam, and the ACFTU in China (http://www.esquel.com/en/index4.html). Section total score / section weighting

32


Company Score

Question Weightings (% of section)

100

30

100

25

66.7

25

0

20

71.675

X 20%

100

15

0

5

0

10

100

15

0

20

0

20

66.7

15

Section total score / section weighting

40.005

X 30%

Total Score

70

/100

Notes of Findings

4. Management 4.1 Resource commitment - Esquel formally established a dedicated Corporate Social Responsibility department in 2004, headed by a Director of Corporate Social Responsibility who reports directly to the Vice Chairman and CEO (http://www.esquel.com/en/index4.html).

4.2 Training for buying agents - Ongoing training is conducted for Esquel employees on labor, environment, health and safety standards (http://www.esquel.com/en/index4.html).

4.3 Training for factory management personnel and workers - This department works together with customers to continuously improve the workplace through trainings on labor standards for management, staff, and our most important asset, workers (http://www.esquel.com/en/index4.html).

4.4 Reward and incentives - No reported evidence Section total score / section weighting

5. Supply Chain Auditing and Reporting 5.1 Commitment to auditing labour standards in the supply chain - Esquel commits to certify its factories under the Worldwide Responsible Apparel Production (WRAP) standards. It is also one of the first 10 factories in the textile and garment industry to publicly commit and support the China Social Compliance standard (CSC9000T). (http://www.esquel.com/en/index4.html).

5.2 Status of audit schedule - No reported evidence

5.3 Public disclosure of manufacturing sites - No reported evidence

5.4 Transparency of the labour standards auditing methodology - The publicly available CSC9000T includes relevant policies for monitoring compliance with the Code (p.16-17, section 1.4.1, Monitoring and measurement, 1.4.2 Evaluation of legal compliance and 1.4.3 Non-conformity, corrective and preventive action (http://www.csc9000.org.cn/PDF/CSC9000T_ENG_2005.pdf).

5.5 External verification of labour standard audits - No reported evidence

5.6 Reporting of the results of audit of labour standard in the supply chain - No reported evidence

5.7 Dealing with non-compliance - The CSC9000T includes a non-compliance policy but there is no indication of a staged approach to dealing with violations at Esquel (p. 15-17, section 1.3.7 Addressing Concerns and Taking Corrective Actions and section 1.4.3 Non-conformity, corrective and preventive action http://www.csc9000.org.cn/PDF/CSC9000T_ENG_2005.pdf).

TRANSPARENCY REPORT II

33


Li & Fung limited Notes of Findings

Company Score

Question Weightings (% of section)

0

40

0

30

0

30

0

X 10%

100

60

100

20

100

20

100

X 20%

0

50

0

50

0

X 20%

1. Governance and Risk Management 1.1 Board-level responsibility for ethical issues in the supply chain - No reported evidence

1.2 Reporting of labour standards issues in the supply chain as a risk factor - No reported evidence

1.3 Risk analysis of ethical issues in the company’s supply chain - No reported evidence Section total score / section weighting

2. Code for Labour Standards in the Supply Chain 2.1 Quality and score of the code for labour standards in the supply chain - The Supplier Code of Conduct covers all ILO core conventions including a living wage and hours of work provision

2.2 Publication and availability of the code for labour standards in the supply chain - The complete Code of Conduct is available to the public on the company’s website (http://www.lifung.com/eng/business/responsible.php)

2.3 Application of the code for supply chain labour standards - The Code of Conduct applies to the entire breadth of its supply chain as well as its own procurement (see Vendor Agreement section of Code of Conduct) Section total score / section weighting

3. Stakeholder Engagement 3.1 Membership of multi-stakeholders process - No reported evidence

3.2 Engagement with NGOs and/or trade unions relating to labour standards in the supply chain - No reported evidence Section total score / section weighting

34


Company Score

Question Weightings (% of section)

50

30

100

25

33.3

25

0

20

48.325

X 20%

50

15

100

5

0

10

0

15

0

20

0

20

0

15

Section total score / section weighting

12.5

X 30%

Total Score

33

/100

Notes of Findings

4. Management 4.1 Resource commitment - The Group's Vendor Compliance (VC) division is organized independently of our sourcing/ merchandising divisions and focuses on improving suppliers' labor, health and safety, environmental and security standards (see Investor Relations, CSR and Sustainability section of the website: http://www.lifung.com/eng/ir/governance.php).

4.2 Training for buying agents - Li & Fung provides systematic training internally to its employees on social compliance requirements (see Annual Report 2007, p.32, para. 4)

4.3 Training for factory management personnel and workers - There is training for factory management personnel on labour standards in the supply chain, but no reference to training of factory workers (see Annual Report 2007, p.32, para. 4)

4.4 Reward and incentives - No reported evidence Section total score / section weighting

5. Supply Chain Auditing and Reporting 5.1 Commitment to auditing labour standards in the supply chain - There is evidence of a policy committing the company to auditing labour standards across the supply chain although the level of commitment to auditing labour standards in the supply chain is unclear (see Annual Report 2007, p.32, para. 3)

5.2 Status of audit schedule - The VC division conducts evaluations of approved suppliers on a routine and systematic basis. In 2007, approximately 8,500 facility inspections and verification audits were performed around the globe (see Investor Relations, CSR and Sustainability section of the website: http://www.lifung.com/eng/ir/governance.php).

5.3 Public disclosure of manufacturing sites - No reported evidence

5.4 Transparency of the labour standards auditing methodology - No reported evidence

5.5 External verification of labour standard audits - No reported evidence

5.6 Reporting of the results of audit of labour standard in the supply chain - No reported evidence

5.7 Dealing with non-compliance - No reported evidence

TRANSPARENCY REPORT II

35


Glorious Sun enterprises limited Notes of Findings

Company Score

Question Weightings (% of section)

33.3

40

0

30

0

30

13.32

X 10%

75

60

100

20

0

20

65

X 20%

0

50

0

50

0

X 20%

1. Governance and Risk Management 1.1 Board-level responsibility for ethical issues in the supply chain - The corporate website illustrates the Vice Director’s role in addressing ethical issues in the supply chain (See last paragraph: http://www.glorisungroup.com/tc/csc9000.html).

1.2 Reporting of labour standards issues in the supply chain as a risk factor - No reported evidence

1.3 Risk analysis of ethical issues in the company’s supply chain - No reported evidence Section total score / section weighting

2. Code for Labour Standards in the Supply Chain 2.1 Quality and score of the code for labour standards in the supply chain - Glorious Sun is listed as an implementing enterprise of the China Social Compliance standard (CSC9000T) in the Annual Report on Social Responsibility of the Chinese Textile and Apparel Industry, p.42 and 64, http://www.csc9000.org.cn/PDF/Report/2007_en.pdf.

2.2 Publication and availability of the code for labour standards in the supply chain - The CSC9000T is available to the public (http://www.csc9000.org.cn/en/CSC9000T.asp?DID=233&DT=CSC900T%20Documents).

2.3 Application of the code for supply chain labour standards - No reported evidence Section total score / section weighting

3. Stakeholder Engagement 3.1 Membership of multi-stakeholders process - No reported evidence

3.2 Engagement with NGOs and/or trade unions relating to labour standards in the supply chain - No reported evidence Section total score / section weighting

36


Company Score

Question Weightings (% of section)

50

30

50

25

33.3

25

0

20

35.825

X 20%

50

15

0

5

33.3

10

100

15

0

20

0

20

66.7

15

Section total score / section weighting

35.835

X 30%

Total Score

32

/100

Notes of Findings

4. Management 4.1 Resource commitment - The CSC9000T includes a policy for senior management accountability (p.13, 1.3.1 Resources, roles, responsibilities and authorities http://www.csc9000.org.cn/PDF/CSC9000T_ENG_2005.pdf).

4.2 Training for buying agents - The CSC9000T includes a policy for training of relevant staff (p. 13-14, 1.3.2 Competence, training and awareness http://www.csc9000.org.cn/PDF/CSC9000T_ENG_2005.pdf).

4.3 Training for factory management personnel and workers - The CSC9000T includes a policy for training of relevant staff (p. 13-14, 1.3.2 Competence, training and awareness http://www.csc9000.org.cn/PDF/CSC9000T_ENG_2005.pdf).

4.4 Reward and incentives - No reported evidence Section total score / section weighting

5. Supply Chain Auditing and Reporting 5.1 Commitment to auditing labour standards in the supply chain - The Vice Director commits the company to regular auditing of supply chain labour standards although the level of commitment is unclear (See last paragraph: http://www.glorisungroup.com/tc/csc9000.html).

5.2 Status of audit schedule - No reported evidence

5.3 Public disclosure of manufacturing sites - Under the Group Members section of its website http://www.glorisun.com/, Glorious Sun links to its manufacturer Advancetex Fashion Garment Manufactury (HuiZhou) Co. Ltd. website, where the factory’s address can be found: http://www.advgm.com.cn/eninfo_Show.asp?ArticleID=423

5.4 Transparency of the labour standards auditing methodology - The publicly available CSC9000T includes relevant policies for monitoring compliance with the Code (p.16-17, section 1.4.1, Monitoring and measurement, 1.4.2 Evaluation of legal compliance and 1.4.3 Non-conformity, corrective and preventive action (http://www.csc9000.org.cn/PDF/CSC9000T_ENG_2005.pdf).

5.5 External verification of labour standards audits - No reported evidence

5.6 Reporting of the results of audit of labour standards in the supply chain - No reported evidence

5.7 Dealing with non-compliance - The CSC9000T includes a non-compliance policy but there is no indication of a staged approach to dealing with violations at Glorious Sun (p. 15-17, section 1.3.7 Addressing Concerns and Taking Corrective Actions and section 1.4.3 Non-conformity, corrective and preventive action http://www.csc9000.org.cn/PDF/CSC9000T_ENG_2005.pdf).

TRANSPARENCY REPORT II

37


Esprit holdings limited Notes of Findings

Company Score

Question Weightings (% of section)

0

40

0

30

0

30

0

X 10%

0

60

66.7

20

100

20

33.34

X 20%

100

50

0

50

50

X 20%

0

30

0

25

0

25

0

20

0

X 20%

1. Governance and Risk Management 1.1 Board-level responsibility for ethical issues in the supply chain - No reported evidence

1.2 Reporting of labour standards issues in the supply chain as a risk factor - No reported evidence

1.3 Risk analysis of ethical issues in the company’s supply chain - No reported evidence Section total score / section weighting

2. Code for Labour Standards in the Supply Chain 2.1 Quality and scope of the code for labour standards in the supply chain - No reported evidence

2.2 Publication and availability of the code for labour standards in the supply chain. - the code of conduct is referred to in Esprit’s website

2.3 Application of the code for supply chain labour standards - the code of conduct applies to the entire supply chain as well as the company’s own procurement Section total score / section weighting

3. Stakeholder Engagement 3.1 Membership of multi-stakeholders process - the company adheres to Business Social Compliance Initiatives and is a member of the organisation’s Board of Directors (see BSCI section, CSR Report 2007)

3.2 Engagement with NGOs and/or trade unions relating to labour standards in the supply chain - No reported evidence Section total score / section weighting

4. Management 4.1 Resource commitment - No reported evidence

4.2 Training for buying agents - No reported evidence

4.3 Training for factory management personnel and workers - No reported evidence

4.4 Reward and incentives - No reported evidence Section total score / section weighting

38


Company Score

Question Weightings (% of section)

50

15

0

5

0

10

0

15

0

20

0

20

0

15

Section total score / section weighting

7.5

X 30%

Total Score

19

/100

Notes of Findings

5. Supply Chain Auditing and Reporting 5.1 Commitment to auditing labour standards in the supply chain - there is a policy committing the company to auditing labour standards across at least part of the supply chain (see BSCI section, CSR report 2007)

5.2 Status of audit schedule - No reported evidence

5.3 Public disclosure of manufacturing sites - No reported evidence

5.4 Transparency of the labour standards auditing methodology - No reported evidence

5.5 External verification of labour standards audits - No reported evidence

5.6 Reporting of the results of audit of labour standards in the supply chain - No reported evidence

5.7 Dealing with non-compliance - No reported evidence

TRANSPARENCY REPORT II

39


Giordano international limited Company Score

Question Weightings (% of section)

0

40

0

30

0

30

0

X 10%

0

60

100

20

- The Code of Conduct applies to the entire breadth of the supply chain and the company’s own procurement (see Ethical Sourcing http://www.giordano.com.hk/web/hk/investors/social-statement.html)

100

20

Section total score / section weighting

40

X 20%

0

50

0

50

0

X 20%

Notes of Findings

1. Governance and Risk Management 1.1 Board-level responsibility for ethical issues in the supply chain - No reported evidence

1.2 Reporting of labour standards issues in the supply chain as a risk factor - No reported evidence

1.3 Risk analysis of ethical issues in the company’s supply chain - No reported evidence Section total score / section weighting

2. Code for Labour Standards in the Supply Chain 2.1 Quality and score of the code for labour standards in the supply chain - No reported evidence

2.2 Publication and availability of the code for labour standards in the supply chain. - The complete Code of Conduct is available to the public in the company’s Annual Report 2007, p.44 and on its website: http://www.giordano.com.hk/web/hk/investors/social-requirements.html)

2.3 Application of the code for supply chain labour standards

3. Stakeholder Engagement 3.1 Membership of multi-stakeholders process - No reported evidence

3.2 Engagement with NGOs and/or trade unions relating to labour standards in the supply chain - No reported evidence Section total score / section weighting

40


Company Score

Question Weightings (% of section)

0

30

0

25

0

25

0

20

0

X 20%

100

15

0

5

0

10

0

15

0

20

0

20

0

15

Section total score / section weighting

15

X 30%

Total Score

13

/100

Notes of Findings

4. Management 4.1 Resource commitment - No reported evidence

4.2 Training for buying agents - No reported evidence

4.3 Training for factory management personnel and workers - No reported evidence

4.4 Reward and incentives - No reported evidence Section total score / section weighting

5. Supply Chain Auditing and Reporting 5.1 Commitment to auditing labour standards in the supply chain - There is evidence of a policy committing the company to auditing labour standards across its supply chain (see last point of Code http://www.giordano.com.hk/web/hk/investors/social-requirements.html and Ethical Sourcing para. http://www.giordano.com.hk/web/hk/investors/social-statement.html)

5.2 Status of audit schedule - No reported evidence

5.3 Public disclosure of manufacturing sites - No reported evidence

5.4 Transparency of the labour standards auditing methodology - No reported evidence

5.5 External verification of labour standards audits - No reported evidence

5.6 Reporting of the results of audit of labour standards in the supply chain - No reported evidence

5.7 Dealing with non-compliance - No reported evidence

TRANSPARENCY REPORT II

41


Chickeeduck Notes of Findings

Company Score

Question Weightings (% of section)

0

40

33.3

30

0

30

9.99

X 10%

0

60

100

20

0

20

20

X 20%

0

50

0

50

0

X 20%

0

30

0

25

0

25

0

20

0

X 20%

1. Governance and Risk Management 1.1 Board-level responsibility for ethical issues in the supply chain - No reported evidence

1.2 Reporting of labour standards issues in the supply chain as a risk factor - There is mention on the Social Responsibility section of the corporate website of labour standards in the supply chain as a risk factor (http://www.chickeeduck.com.hk/eng/responsibility.php).

1.3 Risk analysis of ethical issues in the company’s supply chain - No reported evidence Section total score / section weighting

2. Code for Labour Standards in the Supply Chain 2.1 Quality and score of the code for labour standards in the supply chain - No reported evidence

2.2 Publication and availability of the code for labour standards in the supply chain. - The complete code of conduct is available in the Social Responsibility section of the corporate website: (http://www.chickeeduck.com.hk/eng/responsibility.php).

2.3 Application of the code for supply chain labour standards - No reported evidence Section total score / section weighting

3. Stakeholder Engagement 3.1 Membership of multi-stakeholders process - No reported evidence

3.2 Engagement with NGOs and/or trade unions relating to labour standards in the supply chain - No reported evidence Section total score / section weighting

4. Management 4.1 Resource commitment - No reported evidence

4.2 Training for buying agents - No reported evidence

4.3 Training for factory management personnel and workers - No reported evidence

4.4 Reward and incentives - No reported evidence Section total score / section weighting

42


Company Score

Question Weightings (% of section)

50

15

0

5

0

10

0

15

0

20

0

20

66.7

15

Section total score / section weighting

17.505

X 30%

Total Score

10

/100

Notes of Findings

5. Supply Chain Auditing and Reporting 5.1 Commitment to auditing labour standards in the supply chain - There is a policy committing the company to auditing of its supply chain although the level of commitment is unclear (Social Responsibility section of the corporate website: (http://www.chickeeduck.com.hk/eng/responsibility.php).

5.2 Status of audit schedule - No reported evidence

5.3 Public disclosure of manufacturing sites - No reported evidence

5.4 Transparency of the labour standards auditing methodology - No reported evidence

5.5 External verification of labour standards audits - No reported evidence

5.6 Reporting of the results of audit of labour standards in the supply chain - No reported evidence

5.7 Dealing with non-compliance - There is reference to handling non-compliance with the code of conduct but there is no indication of a staged approach to dealing with violations of the code (Social Responsibility section of the corporate website: (http://www.chickeeduck.com.hk/eng/responsibility.php).

TRANSPARENCY REPORT II

43


Hembly international holdings limited Notes of Findings

Company Score

Question Weightings (% of section)

0

40

0

30

0

30

0

X 10%

0

60

0

20

0

20

0

X 20%

0

50

0

50

0

X 20%

0

30

0

25

33.3

25

0

20

8.325

X 20%

1. Governance and Risk Management 1.1 Board-level responsibility for ethical issues in the supply chain - No reported evidence

1.2 Reporting of labour standards issues in the supply chain as a risk factor - The company considers social issues as a risk but there is no explicit mention that labour standards are considered a risk.

1.3 Risk analysis of ethical issues in the company’s supply chain - No reported evidence Section total score / section weighting

2. Code for Labour Standards in the Supply Chain 2.1 Quality and score of the code for labour standards in the supply chain - No reported evidence

2.2 Publication and availability of the code for labour standards in the supply chain. - No reported evidence

2.3 Application of the code for supply chain labour standards - No reported evidence Section total score / section weighting

3. Stakeholder Engagement 3.1 Membership of multi-stakeholders process - No reported evidence

3.2 Engagement with NGOs and/or trade unions relating to labour standards in the supply chain - No reported evidence Section total score / section weighting

4. Management 4.1 Resource commitment - No reported evidence

4.2 Training for buying agents - No reported evidence

4.3 Training for factory management personnel and workers - Training is provided to production staff in the PRC on company compliance (see Prospectuses, June 2006, http://www.hkexnews.hk/listedco/listconews/ sehk/20060630/03989/EWP117.pdf , Directors, Senior Management and Staff section, p.7, Other Benefits section, bullet point 1).

4.4 Reward and incentives - No reported evidence Section total score / section weighting

44


Company Score

Question Weightings (% of section)

0

15

0

5

33.3

10

0

15

0

20

0

20

0

15

Section total score / section weighting

3.33

X 30%

Total Score

3

/100

Notes of Findings

5. Supply Chain Auditing and Reporting 5.1 Commitment to auditing labour standards in the supply chain - No reported evidence

5.2 Status of audit schedule - No reported evidence

5.3 Public disclosure of manufacturing sites - Hembly has operation arms in China, including Nanjing, Yangzhou (see website, About us, Company background: http://www.hembly.com/ziye1_1.htm and Brand Management, Supply Chain Services: http://www.hembly.com/ziye6_3.htm); the addresses of Hembly’s wholly-owned manufacturing facilities in Nanjing and Yangzhou are disclosed on its website (see Office Locator site: http://www.hembly.com/ziye4.htm).

5.4 Transparency of the labour standards auditing methodology - No reported evidence

5.5 External verification of labour standards audits - No reported evidence

5.6 Reporting of the results of audit of labour standards in the supply chain - No reported evidence

5.7 Dealing with non-compliance - No reported evidence

TRANSPARENCY REPORT II

45


Endnotes and References Endnotes 1. ILO (2008). Global Employment Trends January 2008. p.10. Full report is available at http://www.ilo.org/public/

Secondary School Teachers Federation, Oxfam Canada, Steelworkers Humanity Fund, and UNITE HERE.

english/employment/strat/download/get08.pdf 5. With the courtesy of Maquila Solidarity Network (MSN), 2. The analysis uses a scoring system bas e d o n

the section is taken from this MSN’s report, Maquila

AccountAbility’s online tool, the Gradient Index, available

Solidarity Network (2007). The Next Generation of

at http://www.gradient-index.net

CSR Reporting: Will better reporting result in better working conditions? p.4 & p.11. Full report is available

3. AccountAbility is an international not-for-profit professional institute based in the UK dedicated to the

at this location: http://en.maquilasolidarity.org/sites/ maquilasolidarity.org/files/CodesMemo22.pdf

promotion of organisational accountability for sustainable development through the development of innovative and

6. Nike, FY05-06 Corporate Responsibility Report, p.17

effective accountability tools. For more information, visit www.accountability.org.uk

7. The section is also taken from the MSN’s report, Maquila Solidarity Network (2007) pp.15-16.

4. Ethical Trading Action Group (ETAG) in association with Accountability, Coming Clean on the clothes we wear: Transparency Report Card, downloaded from http://

8. Gap Inc. 2005-2006 Social Responsibility Report, pp.84-85.

en.maquilasolidarity.org/sites/maquilasolidarity.org/files/ ComingClean_Complete.pdf, December 2005. ETAG

9. Business for Social Responsibility (2007). Beyond

is a coalition of faith, labour and non-governmental

Monitoring: A New Vision for Sustainable Supply Chains,

organisations in Canada advocating for government

p. 5. For details, please refer to the full report at this

policies, voluntary codes of conduct and purchasing

location: http://www.bsr.org/reports/BSR_Beyond-

policies that promote humane labour practices based on

Monitoring-Report.pdf

accepted international labour standards. The Maquila Solidarity Network is the secretariat of the ETAG. ETAG includes: Canadian Council for International Cooperation, Canadian Labour Congress, Canadian Auto Workers, KAIROS Canadian Ecumenical Justice Initiatives, Maquila Solidarity Network, Ontario

46

10. Nike, FY05-06 Corporate Responsibility Report, p.18


References Accountability and Insight Investment, 2004. “Gradient:

Oxfam Hong Kong, November 2006. “Transparency Report:

Promoting best-practice management of supply chain labour

How Hong Kong Garment Companies Can Improve Public

standards”, London.

Reporting of their Labour Standards”.

Business for Social Responsibility, July 2007. “Beyond

United Nations Conference on Trade and Development

Monitoring: A New Vision for Sustainable Supply Chains”.

(UNCTAD), 2007. “World Investment Report: Trans-national Corporations, Extractive Industries and Development”.

Ethical Trading Action Group (ETAG) in association with Accountability, December 2005. “Coming clean on the

WWF-UK, November 2007. “Deeper Luxury: Quality and

clothes we wear: Transparency Report Card”.

style when the world matters”.

Ethical Trading Action Group (ETAG) in association with Accountability, December 2006. “Revealing Clothing: Transparency Report Card 2006”.

Global Reporting Initiative (GRI), 2008. “Sustainability Reporting Guidelines & Apparel and Footwear Sector Supplement”.

Global Reporting Initiative (GRI), 2008. “Small, Smart and Sustainable: Experiences of SME Reporting in Global Supply Chains”.

International Right to Know Campaign, January 2003. “International Right to Know: Empowering Communities through Corporate Transparency”.

Maquila Solidarity Network, December 2007. “Codes Memo No. 22 The next generation of CSR reporting: Will better reporting result in better working conditions”.

47


Address

17/F., China United Centre 28 Marble Road North Point, Hong Kong

Tel

(852) 25202525

Fax

(852) 25276202

email

info@oxfam.org.hk

Website

www.oxfam.org.hk

Oxfam Hong Kong is an international development and relief agency working to reduce poverty and injustice around the world. Oxfam Hong Kong recognises that much poverty is caused by injustice and that poverty alleviation requires economic, social and structural change. Oxfam Hong Kong works with people facing poverty and with partner organisations on development, humanitarian, policy advocacy and public education programmes.

Transparency_Report_II_en  

TRANSPARENCY REPORT II HaveHongKongGarmentCompaniesImproved TheirReportingonLabourStandards?

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